- Sanatana Resources (STA) has signed a definitive agreement to sell its Watershed Royalty to TSX Venture Exchange-listed Ely Gold Royalties
- The royalty was originally granted to the company in 2016 as part of an asset purchase agreement with Trelawney Augen Acquisition Corp, now IAMGOLD Corporation
- As consideration, the company will receive C$2.5 million in cash and 1 million Ely Gold warrants, exercisable at a price of $1.31 per share
- Completion of the sale remains subject to IAMGOLD waiving its right of first refusal and approval from the TSX Venture Exchange
- Sanatana Resources (STA) is currently steady at $0.24 per share, as of 2:30pm EDT
Sanatana Resources (STA) has signed a definitive agreement to sell its Watershed Royalty to TSX Venture Exchange-listed Ely Gold Royalties.
The one per cent royalty was granted to Sanatana in January 2016 as part of an asset purchase agreement with Trelawney Augen Acquisition Corp. – now IAMGOLD Corporation – whereby IAMGOLD acquired a 100 per cent interest in 46 mining claims in the Chester and Yeo Counties, Ontario.
Surrounding the Coté Gold Project, which is held under a joint venture between IAMGOLD and Sumitomo Metal Mining Company, the Watershed property covers 7,900 hectares and hosts an NI 43-101-compliant mineral resource.
As consideration for the sale, Sanatana will receive C$2.5 million in cash and 1 million share purchase warrants in Ely Gold. These warrants will be exercisable at a price of $1.31 per share for a period of five-years.
However, should Ely Gold’s 10-day volume weighted average share price exceed $1.97, the expiry date of the warrants may be brought forward.
Peter Miles, CEO of Sanatana Resources, commented on the sale agreement.
“We are pleased to advance monetisation of our Watershed Royalty in a transaction that is non-dilutive to shareholders.
“This transaction will significantly improve our liquidity and will allow us to accelerate exploration of our property portfolio and potentially acquire additional projects,” he added.
The completion of the sale remains subject to a number of conditions, including IAMGOLD waiving its right of first refusal to purchase the royalty and approval from the TSX Venture Exchange.
In the event that IAMGOLD exercise its right to acquire the royalty, Sanatana will be required to pay a break fee of $500,000 to Ely Gold Royalties.
Sanatana Resources (STA) is currently steady at $0.24 per share, as of 2:30pm EDT.